A STUPID ECONOMY

 

 A STUPID ECONOMY

 

Stupid in the dictionary is defined as slow of mind; given to unintelligent decisions or acts; senseless, dull, etc.  When used as an adjective it usually pertains to a person as in a ‘stupid person’ and not to a rather abstract concept such as ‘a stupid economy’.  It seems rather bold on my part to add stupid as an adjective to the word economy.  Why did I use it?  All economies are people driven and everybody has a finger in it, either as someone in the driver’s seat or as a beneficiary, an active participant or a passive recipient.  Driven by need and fueled by energy it has become a massive global behemoth and with an incredible impact.  Our attempts to control and guide global economies along sensible supply and demand lines and needs have been rather spotty and erratic.  Some of us do rather well and way too many people on our planet do rather poorly.  The pressures are enormous and subject to many dubious interventions; mostly undertaken by governments struggling with horrendous debts and budget deficits.  The beast—and that will be us—has a massive appetite and it refuses to go on a diet.  Life is about consequences, about balance and impact.

BALANCE AND IMPACT! 

In the western world prosperity, progress and increased wealth accumulation has led to populations living longer and this has serious consequences.  It has also affected poorer nations, and our relationship with them, as a significant part of our so-called humanity seems to focus on keeping everybody alive.  A costly undertaking that causes government deficits to rise exponentially.  What to do with all those people and especially those who qualify as non-contributors?  The sick, the poor, the elderly, the disabled, the unemployed and those considered unemployable for whatever reason.  The segment of non-contributors is growing by leaps and bounds, despite all our noble efforts to reduce dependency and all the government programs designed to encourage reintegration and full participation in the workforce: to become positive contributors to the economy instead.

"What looks great on paper can turn out to be the exact opposite."

And now we get back to the heading of this article: a stupid economy.  Whether you want to call it stuck in a treadmill or trapped in a vicious circle, we seem to stick to an economic recipe that simply isn’t working.  The remedy pursued is twofold: grow the world population and thus grow the economy by adding more consumers, who, if the picture unfolds as desired, will generate the extra cash needed to keep everything going, to provide for the programs and services all the non-contributors can’t afford, yet rely on in order to survive.  It is not working because all around the globe governments are sinking further and further into debt and the planet is showing the painful signs of neglect, abuse and relentless exploitation.

Debt and deficits cause inflation to rise and the price of everything keeps going up and up.  Interest payments on escalating debt and deficit policies are filling up the pockets of the rich who are the only ones benefitting from all the inflationary cash that we keep printing and printing without any real asset backing.  And that has become part of the twofold approach that leads to a stupid economy.

WE KEEP DIGGING DEEPER FINANCIAL HOLES!

In the past one hundred years we have experienced some horrendous conflicts, two world wars and dozens of regional wars and conflicts.  The cost in human suffering has been tremendous, but it has inflicted a huge amount of economic damage as well.  A loss of resources, damaged infrastructures and above all, money borrowed to fund the war effort.  War only benefits military contractors and overall it is a deplorable net-negative enterprise that has left governments around the world stranded in decade’s worth of debt.  The world followed the advice of economist Maynard Keynes (born in 1883, died in 1946).  When disaster strikes and your economy is shattered (war qualifies for that distinction) then you have no other option than to borrow heavily (if needed) to stimulate the economy and boost growth.  It is a recipe that works if you’re left with no other choice.  It is a different story when governments continue to latch onto this concept, not to boost the economy, but to pay for everything desired; health, education, infrastructures, social services, pensions and benefits, you name it, whatever is promised, requested and demanded.  We’re funding entitlements through annual deficit spending.  Balanced budgets are a thing of the past.  Shrinking the overall debt and paying back what is owed has become a hot potato item that not a single government wants to touch.  It would mean cuts.  Big cuts!  Maynard Keynes and his economic solutions should have been put out to pasture decades ago.   

A stupid economy lacks substance and corrective action and it caters to the ludicrous concept that through excessive deficit spending we’re digging ourselves out of a financial hole, rather than digging deeper and deeper!  Well, it’s not working as planned and there are no signs on the financial horizon that any of our schemes are working.  Einstein once stated, “Only stupid people repeat a failing experiment over and over again.  What do they expect?  A different outcome and result?”

We have reached a point where we haven’t got a clue as to how to extract ourselves out of this mess.  The accumulation of stupidity, of piling debt on top of debt, leaves no realistic possibility of ever paring it down.  There is no economic miracle waiting in the wings to make a surprise appearance.  Tara!  All debt gone!

YET ANOTHER EXAMPLE OF ENERGY AND MOMENTUM

Too many people, too many voices and nobody is listening.  All the ingredients needed to fuel the stupid economy.  It is yet another example of how energy and momentum impact on everything we do.  The processes we have set in motion are too intense, erratic and volatile.  Too much negative energy and negative factors that defy fixing, oversight or control.  In a roundabout way this explains the economic ups and downs, swinging from recession to depression and back up to a bull market that promises untold wealth and riches.  Stupid is being repeated over and over again.  I mean, we honestly try, but the needs of the beast—and again, that will be us—can’t be met and when many are forced to get by on little or nothing at all, it is a recipe that calls for a perfect storm.

I love it when my portfolio goes up in value and I have some extra cash to burn.  Who wouldn’t?  But when it goes down in value I quietly sulk and trim my financial sails.  However, the temptation to burn through cash is a failing all of us are subjected to, tempted if you like.  You can’t take it with you.  But . . . nobody wants to walk around with an empty wallet, flat broke and hoping for a financial miracle.  Well, the miracle all of us anticipate and hope for is the kind where a caring government comes to the rescue.  To be able to hold out a hand for an extra helping of cash (or as Oliver Twist would plead.  ”Can I have some more?”).  There are a lot of Oliver’s out there and it won’t put an end to the stupid economy anytime soon.

Some people think that properly taxing the rich would do the trick, but it will prove to be a short stopgap measure as the rich will go out of their way to find new financial escape routes, loopholes and safe havens.  They will do anything to get away from poor people.  Doing with less, accepting limitations and sharply reducing our human numbers will go a long way in reducing economic and financial stresses.  Energy and momentum appear to have the upper hand in this matter as well and I won’t hold my breath that a painless solution will be forthcoming.

Humans are great at talking a crooked line straight. Whatever suits the narrative!